While you can earn interest on a saving account, the interest rate is not fixed and it may go down or may go up. So, If you want to fix your interest income with a fixed interest rate, you should look for fixed deposit, also called as certificate of deposit (CD).  The CD can be of three months, six months, one year or higher. The limitation in CD is that you cannot take out money in between unless you are willing it to pay some penalty, which is a usually small percentage of the total deposit.  So, CD is only useful compared to saving account, when the interest rate in CD is higher and you don't intend to require the money in the near future.

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